For Sale by Owner

Robert J. Bruss’s Real Estate Q & A is biased and misleading when it continually advises against the owner selling his home without a broker. Your readers should learn there are good reasons why so many people fare better with “For Sale by Owner.”

First you must research comparable homes as to both asking and selling prices. After determining (as an example) that you should ask about $220,000 and expect a sale in, say, the $200,000 range, you can now decide whether to list or proceed on your own. Consider the alternatives:

If you list with a broker and get $200,000 for your house, you pay 6% commission and net $188,000. Your buyer, using an 80% loan, must come up with $40,000 down.

If you sell it yourself at your own price, the buyer faces the same $40,000 down, but you have $12,000 more in your pocket. (How long would it take you to save that kind of money?) Then, if the buyer is short of the $40,000 you can offer to carry back a note for as much as $12,000 and still net as much as if you had hired a broker. You’ve made it easier for the buyer and have created a larger market because there are many more prospects with $28,000 than there are with $40,000.

The extreme example is that of cutting 6% off both asking and selling prices so you net only the amount you would have through a broker. This often speeds the sale, Imagine asking $206,800 (against $220,000) and being willing to go as low as the $188,000 you would have gotten with a broker. You create a wide marketing advantage over your competition without it costing you a cent.

It is usually wise to compromise. Offer at, say, $213,900 and draw the line at about $194,000. With that approach you enlarge your market by making it easier on the buyer, have about $6,000 to offer as a second if necessary, and save half the commission. Of the three potential parties to the sale, you and the buyer come out ahead.

RUSSELL T. CONNORS, Pismo Beach